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FINANCIAL ACCOUNTING Ph.D. SEMINARFeng Gao (fgao@business.rutgers.edu)Carolyn Levine (clevine@business.rutgers.edu)Class times: Fridays 1-3:50.Fall 2017Office: NB – 4137 100 RockOffice: NWK – 921 1 WPClass location: NWK and NBCOURSE DESCRIPTIONThis course provides an introduction into research in financial accounting. The primary objectiveof this seminar is to expose students to ongoing and emerging financial accounting issues and toacquaint them with various research methodologies used in empirical financial accountingresearch.COURSE MATERIALS- The syllabus lists the papers we will cover; all are available online (either from theauthor’s website or Rutgers’s library site)- Slides will be posted on blackboard (blackboard.rutgers.edu) and your official Rutgersemail account regularly.LEARNING GOALS AND OBJECTIVES- This course is designed to help students develop skills and knowledge in financialaccounting research.- Students who complete this course will be able to critically read, understand, and analyzeacademic papers in a variety of financial accounting areas.- Students develop these skills and knowledge through reading papers, presenting papers,and participating in class discussions.PREQUISITESThis course is designed for 2nd year (and higher) Ph.D. students.ACADEMIC INTEGRITYStudents are responsible for understanding the RU Academic Integrity documents/AI Policy 2013.pdf). I will stronglyenforce this Policy and pursue all violations. All written submissions must be your own work;you must carefully cite and quotes reliance on earlier papers and language where necessary. Donot try to pass off others’ writing as your own. See business.rutgers.edu/ai for more details.1

ATTENDANCE AND PREPARATION POLICYPlease read or at least skim all of the papers prior to class, and take notes in the margins. Thisway, you will be able to ask questions and follow the lecture.For the student presentation papers, you must read each carefully, and prepare three questions (tobe submitted each week) about the paper.CLASSROOM CONDUCTTypically, Carolyn or Feng will present during the first 60-90 minutes of class. There may be atheoretical model and an application for each topic, or two applications. The topics and readingsare listed below in the class schedule. Students are expected to read each of the papers prior toevery class. Papers can be accessed electronically from the library website, SSRN or from theauthors’ personal websites. Feel free to interrupt at any time with questions or comments.Although there are “lectures,” you should treat them as academic seminars.The second half of each weekly class will be student led discussions. One student will beassigned as the “author” of the paper, and will present the paper to the class. This presentationmay use slides, or may be more informal but the role of the author is to describe the (a) researchquestion and the theoretical underpinnings (b) the research methodology and assumptions (c) thedata and (d) the results and interpretation. The other students in the class will be seminarparticipants. Each student will be required to submit three to five questions about the paper priorto class, and should feel comfortable interrupting the “author” during his/her presentation. Part ofyour grade will depend on your participation in these roles.EXAM DATES AND POLICIESThere are no exams. Instead, you will have referee reports and research project milestones,discussed below.REFEREE REPORTSWhen we have outside presenters, you will be expected to thoroughly read their papers andprovide a written referee report.High quality and timely referee reports are essential to the performance of any journal. You willbe asked to referee papers throughout your career, and you will be (implicitly) evaluated (by theeditor) based on the quality of your reports. You might skim the paper first to get an idea of thebig picture, and then read it more carefully to make detailed comments. Make notes in themargins or underline/highlight important issues. Often times, seminar participants will mark uppapers and give the more informal markups directly to the author who is presenting. It isimportant to leave out any nastiness. Authors should be able to learn how to improve their paper2

from your report, whether or not it has a chance for publication in the journal for which you arerefereeing.Begin the report with a (short, one to two paragraph) summary of the research question and thefindings. Then, discuss whether the author has made a contribution, whether there are problemsin the analysis or issues that need clarification or further work. Since this is not an officialrequest from a journal, you need not provide a publication recommendation (i.e.,accept/revise/reject)Typically, referee reports have the following structure Summary and contribution Major Commentso This section is where you raise the major questions and concerns about the paper. Ifthe analysis is incomplete, point it out. If it needs to be more general, makesuggestions and requirements for how the authors could extend or improve the paper.An example of one paragraph (from a sample referee report that I wrote) I also think the paper misses many interesting aspects of disclosure. First, whydoesn’t disclosure allow the firm to be a Stackelberg leader? If that were the case,then there would be some tradeoff which would encourage firms that have positivelycorrelated output to also want to disclose. How do the authors envision thecommitment to a disclosure policy? Why isn’t disclosure determined after observingthe realization? Is it that disclosure is sticky? If that is the case, then there should becosts of disclosure if the correlations are expected to change over time. What, if any,are the penalties to being a “low discloser?”Minor Commentso This section includes small details, questions that can be easily addressed within thecontext of the existing data and framework, typos and other small points. An example(taken from a referee report I wrote about a different paper)o Another missing citation is Hayes (1998).o The main specification (p. 14) is not numbered, but referred to as (2) later in thepaper.o Table 5 does not have raw returns (p.20)RESEARCH PROJECTThe goal is for each student to have a running start on his/her (original) summer research paper.To that end, we will require submission of several milestones along the way. The due dates arelisted in the course schedule and details for each are listed below. Please adhere to the pagelimits.1.Suggestion of a topic (as specific as you can be, but you may select one of the 10-12broad areas we are going to discuss if you do not have a topic in mind). 1 page.a. Do a careful literature search to ensure that your topic has not be fully researched(i.e., the idea must have a component of originality)3

2.3.4.b. List the reasons this area/topic interests you.c. Suggest three or four papers in this area that you would like to read to betteracquaint yourself with the topic.Literature review. 5 pages.a. Using the papers you suggest along with the list that we individualize for you,write a summary of each paper. Discuss the contributions of the paper.b. Propose some ways you could expand on each of these papers (it may be theaddition of a single variable, an alternative approach to measuring the variables ofinterest, or any other changes that would make the paper different and better).c. Discuss how your topic (now, hopefully better fleshed out and more specific) fitsinto this line of research.Research topic proposal. 5 pagesa. What is the research question? Incorporate the feedback you have received onpart (c) of the second milestone.b. How will you address the question? What methodology will you use (be asspecific as possible! A good answer would begin like “I will estimate a modelwhich examines whether trading volume increases with the number ofdiscretionary public disclosures as the independent variable,” NOT “I will runOLS.”c. How will your paper contribute to the existing literature?Research design and Data (no page limit)a. What are the variables you need? Why are these good proxies for the underlyingeconomics?b. What are the control variables you need?c. What will your econometric or analytical approach be?d. Where will you get the data? An answer like “WRDS” is completelyunacceptable. We are looking for specifically how you will measure each variableGRADING POLICYCourse grades are based on your participation, scores on the required submissions (see ResearchProject section and below) and presentations in the class.We may have guest presenters from our faculty (or senior Ph.D. students). On those dates, therewill be no student led discussions, but instead, students will be required to write a referee reportfor the paper that is presented. The faculty member will evaluate the quality of those reports,and inform us which were most helpful for them in revising their papers. The last part of yourgrade will depend on these evaluations.4

COURSE SCHEDULE: The material on the schedule will stay constant, but the order ofclasses may change, due to last minute inclusions of seminars. The location of the class will be inthe location of the seminar (unless there is a conflict for AIS and accounting students; then theclass will be in NWK)Date1234567891011121314TopicItems DueTOPIC 1: DEMAND FOR ACCOUNTING REGULATIONLEVINE LECTURE ONLY [NEWARK]FACULTY PRESENTATION: MOFFITT15-Sep TOPIC 2: EVENT STUDIES:LEVINE LECTURE ONLY [NEWARK]TOPIC 7: ESTIMATING TREATMENT EFFECT USINGEXOGENOUS SHOCK22-SepGAO LECTURE & STUDENT LED DISCUSSION[NEW BRUNSWICK]TOPIC 8: USING INSTRUMENT VARIABLES29-Sep GAO LECTURE & STUDENT LED DISCUSSION[NEW BRUNSWICK]TOPIC 3: VOLUNTARY DISCLOSURE6-Oct LEVINE LECTURE AND STUDENT LED DISCUSSION[NEWARK]TOPIC 9: REGRESSION DISCONTINUITY13-OctGAO LECTURE & STUDENT LED DISCUSSION, [TBD]TOPIC 4: ACCOUNTING METHOD CHOICES20-Oct LEVINE LECTURE & STUDENT LED DISCUSSION[NEWARK]TOPIC 6: THE ROLE OF AUDITORSLEVINE LECTURE AND SENIOR STUDENT27-OctPRESENTATION: CALABRESE[NEWARK]TOPIC 5: INFORMATION ASYMMETRY3-Nov LEVINE LECTURE AND STUDENT LED DISCUSSION[NEWARK]TOPIC 10: MATCHING AND SELECTION10-Nov GAO LECTURE & STUDENT LED DISCUSSION[NEW BRUNSWICK]TOPIC 11: CSR RESEARCH17-NovGAO LECTURE & STUDENT LED DISCUSSION, [TBD]24-Nov THANKSGIVING BREAK – no classSTUDENT MILESTONE PRESENTATIONS1-DecGAO [TBD]STUDENT MILESTONE PRESENTATIONS [NEWARK]8-Dec8-Sep5REFEREEREPORT dueMILESTONE1MILESTONE2REFEREEREPORT dueMILESTONE3MILESTONE4